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David Randolph · February 01, 2007, 03:57:52 AM

ZQK is now trading at a forward earnings multiple of $14.21/$1.12 = 12.7, and the industry average is 21.5, so I find the current share price weakness odd.

Volume picked up considerably yesterday. I think ZQK will bottom here around $14 and will make a bullish move towards the higher end of its trading range, around $16. At least that.

I'll continue holding ZQK.

David Randolph · February 02, 2007, 04:10:14 AM

18 analysts are expecting EPS of $0.09 on $550 M revenues in fiscal Q1 2007 (ends in January 07). This is a seasonally weak quarter. But I'm not sure it will be that weak, I think there's room for a positive surprise, because fiscal Q4 2006 was so strong (the highest quarterly revenue number in the company's history), that there can be some sales momentum carried through fiscal Q1 07.

As you can read from this thread, ZQK has been growing around 30% a year for the past 10 years, and I expect that trend to continue for 10 more years. Moreover, the stock is trading at an attractive forward earnings multiple of 12.7.

I'll continue holding ZQK, despite some short term weakness in the share price.

David Randolph · February 05, 2007, 04:13:59 AM

Volume on ZQK's shares is increasing and that tells me bulls are being attracted by these relatively low prices. Valuation is quite compelling, at 12.7 times 2007 estimated earnings, for a company that has been growing 30% a year for the past 10 years.

The small doji on Friday can be the beginning of a bull leg towards the high end of its trading range, which is $16. Time will tell, but I'll continue holding ZQK.

David Randolph · February 06, 2007, 06:24:07 AM

Finally a positive reaction from ZQK, rising 1.41% on yesterday's down market. I'll keep holding the stock.

David Randolph · February 07, 2007, 05:54:20 AM

Another advance day for ZQK without any news. I expect it to approach the upper end of its trading range, around $16 a share, and probably breakout above that level throughout the course of 2007.

I'll continue holding ZQK.

David Randolph · February 08, 2007, 06:01:08 AM

ZQK is slowly, but surely, coming back up towards the upper end of its lateral channel, around $16. I'm losing just 6.88% now, lets see if this Main holding turns green sometime soon. That's my expectation.

realcoolhead · February 08, 2007, 05:17:25 PM

Warm winter will bite $0.16/share off ZQK's 07 earning ...

capricho · February 08, 2007, 10:33:35 PM

Aftermarket news:

Quiksilver Inc. shares fell $1.52, or 10.4 percent, to $13 in the late session after giving up 10 cents to $14.52 on the New York Stock Exchange, when the company cut its 2007 outlook.

David Randolph · February 09, 2007, 06:57:33 AM

Quote from: realcoolhead on February 08, 2007, 05:17:25 PM
Warm winter will bite $0.16/share off ZQK's 07 earning ...

Quote from: capricho on February 08, 2007, 10:33:35 PM
Aftermarket news:

Quiksilver Inc. shares fell $1.52, or 10.4 percent, to $13 in the late session after giving up 10 cents to $14.52 on the New York Stock Exchange, when the company cut its 2007 outlook.

• Quiksilver Inc. Revises Guidance
Business Wire (Thu 4:00pm)

This was a shocker

Now ZQK is expecting EPS for the full fiscal 2007 to come in between $0.75 - $0.78. This puts forward earnings multiple at $13/$0.765 = 17 (I'm already considering the after hours close).

Of course, a speculator must be prepared for this type of occasion, this is why I only invest 6.66% of capital in each stock, to diversify risk. This way the 10.54% decline in after hours trading in ZQK shares will shave about 0.6% of the Main's total value. Bad, but not dramatic.

But I have to say I wasn't smart playing this stock. I was somewhat blind to what the market was telling me. You see, the July - September quarter numbers were so powerful that the stock shouldn't have gone down after they were released, it should have gained 20 or 30% over the next three or four months.

But no, it went down, it broke down below an ascending trendline, and I kept focusing on the long term fundamental trends instead of hearing what the market was telling me.

This trade will give me a precious lesson, for which I'll pay the appropriate price.

The lesson is:

- Historical fundamental trends are important, but they can change, and the market usually anticipates that change, by being weak while great news are being released. In that case, I should listen and respect the market.

The price to pay for the lesson is:

- A 17-20% loss on this trade as I'll sell the stock at the open.

I don't think I should continue holding it due to three main reasons:

1) The forward earnings multiple is 17, that's not cheap, and fundamental trends are deteriorating (yeah, blame it on the weather). The stock can go down to a 10 times earnings multiple, that is, below $8 a share.
2) The lesson learned is valuable and I want to keep it in mind going forward. The price paid will work as a reminder.
3) I don't like pain. I cut the losses and let the profits run.

Therefore, the trading plan is SELL ZQK.

Amarens · February 09, 2007, 09:24:28 AM

David,

Do you choose a market order in these cases?

Amarens

David Randolph · February 09, 2007, 09:31:51 AM

Quote from: Amarens on February 09, 2007, 09:24:28 AM
David,

Do you choose a market order in these cases?

Amarens

Yes, who cares about a few ticks? When I want to buy, I buy, when I want to sell, I sell.

Amarens · February 09, 2007, 09:40:29 AM

Thanks for the quick respons. That's what I did but don't always know. Don't dare to at Otcb, got screwed to often.

Bummer trade, but hey is all in the game

Amarens

David Randolph · January 02, 2008, 04:36:40 PM

Quote
• Quiksilver Inc. Revises Guidance
Business Wire (Thu 4:00pm)

This was a shocker

Now ZQK is expecting EPS for the full fiscal 2007 to come in between $0.75 - $0.78. This puts forward earnings multiple at $13/$0.765 = 17 (I'm already considering the after hours close).

Actual results came in much worse than this lowered guidance:

• Quiksilver, Inc. Reports 2007 Fourth Quarter and Full Year Results
Business Wire (Thu, Dec 13)

UPDATE 2-Quiksilver 2008 view below Street, shares fall
Thu Dec 13, 2007 5:55pm EST

«The bad news gave fuel to Quiksilver nay-sayers who have contended the 2005 purchase of French ski company Rossignol exposed the apparel maker to the vicissitudes of weather-related risk that are a part of the winter sports business.»

«For fiscal 2008, the company expects earnings per share of approximately 70 cents on revenues of $2.7 billion.»

I would say that at $7, that is, a forward p/e of 10, ZQK would look attractive, but I'm not all that confident, since the company already disappointed investors by a wide margin in 2007. 15% of ZQK's sales are related to winter sports like ski and snowboarding, and if you believe Al Gore ... the snow is melting

QuickSilver is a great company and trademark, but after what Peter Lynch would call "diworseification" it can only reemerge as a turnaround play and for ZQK to be a strong turnaround candidate it needs to go down some more ... I feel the pain is not over yet, I'll let them bleed some more before considering this one.

David Randolph · April 07, 2008, 11:08:17 PM

ZQK recovered nicely from that low around $6. At that price it was trading at 8.6 times the $0.7 EPS estimate for 2009, so relatively cheap.

Yesterday it closed at $10.37, or 14.8 times the 2009 EPS guidance. Not particularly attractive, unless something changes on the fundamentals.

News:

ZQK